At 07:16 AM 06/11/2001 -0800, you wrote:
[snip]
>Oh #2: There might be only one or two cents of material in one
>of those screens, but engineering, manufacturing overhead,
>marketing, taxes, distribution and an acceptable profit
>(remember this isn't a high-volume product) all contribute to
>the pricing of those screens. A healthy dose of manufacturing
>and sales experience will teach you a thing or two about
>pricing. Feel free to build your own, Larry.
Indeed.
Having been involved in product development and promotion/marketing, I found
that the minimum mark-up from development costs alone that would ultimately
allow for any sort of profit whatsoever on a product was about 400%, give or
take a few percentage points. As it turns out, there are huge human, financial
and technical obstacles between a product's development and its final delivery
to the end customer, and production costs of the second and subsequent units
were almost irrelevant in the pricing decision.
As the saying goes, "The *second* Cipro tablet cost Bayer AG two cents to make.
The *first* one cost five hundred million dollars."
Garth
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